Aetna Health Inc. v. Davila, 542 U.S. 200 (2004)
Aetna Health v. Davila is the Supreme Court's leading case on ERISA's doctrine of complete preemption.
Are state-law causes of action against HMOs under the Texas Health Care Liability Act for failing to exercise ordinary care in making coverage/utilization review decisions completely preempted by ERISA § 502(a)(1)(B), thereby making removal proper and foreclosing state tort remedies?
A state-law cause of action is completely preempted by ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)) if: (1) the plaintiff, at some point in time, could have brought the claim under § 502(a)(1)(B) to recover benefits due under the plan, to enforce rights under the plan, or to clarify rights to future benefits; and (2) there is no other independent legal duty that is implicated by the defendant's actions. When both conditions are met, the claim is recharacterized as a federal ERISA claim, removal is proper, and ERISA's civil enforcement mechanism provides the exclusive remedy, preempting state-law causes of action that "duplicate, supplement, or supplant" ERISA's remedial scheme. The saving clause in ERISA § 514(b)(2)(A), which preserves certain state laws that regulate insurance from conflict preemption, does not limit complete preemption under § 502.
Yes. The plaintiffs' THCLA claims are completely preempted by ERISA § 502(a)(1)(B) because they could have been brought as actions to recover benefits or enforce plan rights, and the HMOs' duties arose solely from the ERISA plans and their administration. Removal to federal court was proper; the state-law claims are displaced by ERISA's exclusive civil enforcement scheme. The Court reversed the contrary judgment and remanded.
Davila is the touchstone for ERISA complete preemption. It supplies the now-canonical two-prong test used to determine when state-law claims are recharacterized as federal ERISA § 502 claims and removed to federal court. For health-law and employment-law practitioners, the case sharply limits state tort recovery against HMOs for coverage/utilization decisions, steering such disputes into ERISA's narrow remedial channel. For federal courts, Davila clarifies the distinction between defensive, conflict preemption under § 514 and jurisdictional, complete preemption under § 502. For law students, Davila is frequently examined alongside Metropolitan Life v. Taylor, Pilot Life, Pegram, and Rush Prudential. It is essential for issue spotting: identify whether the gravamen of a claim is a denial of plan benefits and whether any independent legal duty is implicated. If not, the claim is completely preempted, removable, and limited to ERISA remedies (benefits due, injunctive or declaratory relief, and certain equitable relief)—not tort damages.